Rainbow Foods experiment: Doubling down on coupons

Jeff Wheeler, Star TribuneNatasha Moore, in her basement storage room Tuesday, is an extreme couponer. She has long had a system to maximize her grocery savings. “Sometimes, I’m there for four to five hours.” But one analyst says bargain hunters aren’t loyal to one store and questions if Rainbow will gain many lasting customers.

Stephanie Acocella was thrilled when she found out Rainbow Foods planned to try out unlimited double coupons, a cash-saving phenomenon that had yet to reach the Twin Cities.

So excited, in fact, that she's taking the day off work Wednesday to be at the front of the line when the promotion begins.

"I'll be there when the doors open at 6 a.m. with about 50 coupons, organized by store layout," said the 26-year-old from Apple Valley.

Deals in which supermarkets double the value of coupons, sometimes for a limited time, took off in popularity over the past two to three years with the rise of the TV show "Extreme Couponing." Rainbow's promotion is for two days, Wednesday and Oct. 31.

But while the offers bring in customers, they are expensive for stores, which cover the discounts without help from manufacturers. Unlimited deals are becoming less common at stores in other parts of the country.

"They dropped it after too many people were coming in with 20 coupons of one item to stock their mini warehouses," said Phil Lempert, a food industry analyst at Supermarketguru.com.

Jeff Wheeler, Star Tribune

Natasha Moore plans to be at Rainbow with a cache of coupons when the store opens.

Rainbow is going against the trend to find a new way to advertise low prices, Lempert said, but he doubts it will retain a lot of new customers. The problem with bargain shoppers is that they're not loyal, he said. They're at Rainbow one day, then Wal-Mart, and the dollar store after that.

But the offer is also a way for Rainbow to go after rival Cub Foods, while bringing in some quick cash. Cub's parent, Eden Prairie-based Supervalu Inc., put itself up for sale in July, either whole or in pieces.

"This is a very smart move by [Rainbow parent] Roundy's," said David Livingston, a supermarket analyst in Waukesha, Wis. "It takes market share from Supervalu and raises some short-term cash, which will help Roundy's cover its upcoming dividend."

Carrie Rocha of Pocketyourdollars.com, a supermarket savings site, said she and other local coupon bloggers have received more than 250 comments anticipating the two-day promotion.

"There are people commenting on my blog who say they've spent 12 hours preparing their lists," Rocha said. "One woman said she is as excited as a child on Christmas morning,"

Previously, Rainbow capped its double coupon offers at five coupons per shopper, per transaction. The new offer is a pilot, according to Vivian King, spokeswoman at Roundy's, Rainbow's parent company.

"We can't say if it will replace the current system of doubling," she said. "We'll evaluate it afterwards."

With the new promotion, extreme couponers cannot redeem more than five coupons on identical items and are limited to one transaction per day. That cramps the savings for extreme couponers like Natasha Moore of Anoka.

Under the old limits, she would fill carts with groceries and beat the system by having the cashier ring up multiple, separate $25 transactions. Sometimes she purchased a gift card to reach the dollar minimum.

That allowed her to double up to 200 coupons, but it had to be done five at a time. "Sometimes, I'm there for four to five hours," she said.

Under the new promotion, Moore says she'll be able to get her shopping done faster but with smaller savings. "But if I have 100 coupons for ramen noodles, I will only be able to use five," she said.

King wouldn't comment on whether the new promotion is being done to discourage über shoppers like Moore but said the new offer will make it easier to move customers through checkout lines as quickly as possible.

While hard-core couponers regard the promo as a deal not to be missed, others dismiss it as a non-event. Jolenta Penoncello of Richfield says coupon quality has deteriorated to a point where she uses only store coupons.

"There aren't as many coupons as there used to be, and now you have to buy two of an item to save a quarter," Penoncello said. "It's not worth it to me. I've given up on manufacturer's coupons."

Arguably, the coupon craze is on the decline. TLC's "Extreme Couponers" has yet to be renewed for next season. After steady increases from 2009 to 2011, grocery coupon redemption declined by 12.8 percent in the first half of 2012, according to NCH Marketing Services, an Illinois coupon clearinghouse for retailers and manufacturers.

At the same time, coupon distribution was down 1.2 percent for the first half of 2012 and was down 8.1 percent in 2011. What irritates many clippers is that the average face value of coupons and expiration periods are also declining.

That's no deterrent to Moore. After saving 75 percent on her grocery bills for her family of eight thanks to double coupons, she wants to expand. "The refrigerator and freezer are overflowing. We're working on getting a second set."